Iraq Oil Report

Plus:
*Putin’s plea for Iraq oil deals during Lukoil CEO’s visit
*The power struggle
*Basra violence get Maliki visit

Iraq announced tenders for international oil companies to test two of its largest oil fields, develop a major natural gas field and build a pipeline to Iran, Ben Lando reports for UPI. The four tenders, revealed on the Oil Ministry Web site, are part of the country’s larger effort to increase oil production and exports while meeting domestic demand.

Russian President Putin presses Iraqi Prime Minister Nouri al-Maliki to revive an old oil deal as the head of Lukoil visits Baghdad, Ahmed Rasheed and Dmitry Zhdannikov report for Reuters. In a letter, Putin wants Iraq to give Lukoil the development deal for the West Qurna oil field. Lukoil held the contract from the late 1990s until 2002 when it was cancelled. Saddam’s government said the company was behind on promised investment, thus violating the deal. Lukoil claims sanctions prevented investment in the 6 billion barrel field.

Putin also proposed Russian investment on a pipeline from Kirkuk to Syria, Lucian Kim reports for Bloomberg News. Lukoil CEO Vagit Alekperov led a delegation to Iraq, meeting with the foreign minister, president and oil ministry. Total and Chevron are in talks with the ministry for a two-year technical support agreement for the field. Then the field will be up for bidding for longer term development, according to the ministry. It says Lukoil would have to bid like other companies and would not get preferential treatment. Last month Russia agreed to forgive $12 billion in debt, long held over Baghdad’s head, in a move appearing to be a plea for energy deals.

Who controls Iraq’s oil?, a report by Faisal Islam of UK’s Channel 4 News.

A different kind of power struggle in Iraq: Most residents get only a few hours of electricity a day. In a reversal of the old days, the problem is stickiest in Baghdad, Alexandra Zavis reports for the Los Angeles Times. Baghdad is receiving only a few hours per day, down from the pre-war levels when Saddam directed electricity generated around the country to his stronghold capital. Zavis writes it’s the current government’s prerogative to equally distribute the electricity around the country — a few hours per day, at best. That actually dates back to the Coalition Provisional Authority’s decision to attempt to appear fair. However, Baghdadis used to 20 hours a day under Saddam were and are none too happy about such a dramatic reduction under the post-Saddam governments.

A number of U.S.-planned, led and paid for (sometimes with Iraqi funds) power projects weren’t able to integrate with Iraq’s power system for a number of reasons: lacking infrastructure to carry the proper fuel to the plant or large amounts of electricity into the grid; not enough funding for training and upkeep of the state of the art plant; and of course, the security situation. While U.S. and Iraqi efforts have increased power producing capacity – and have set record output levels despite obstacles – demand has increased, largely because of the influx of cheap but energy intensive products like the washing machine of Khitam Radi in Zavis’ story. This is also a result of post-invasion decision making by the United States. After the invasion Iraq’s borders were thrown open to the free market. Iraqis forced to use mainly products made in state industries purchased the products out of necessity and curiosity, reducing demand for the state factories (which were hurting and largely shuttered by the war) and depressing prices, which hurt the economy.

Iraq’s prime minister joins defense and interior ministers in oil capital Basra as increased violence leads to new government investment of troops, Wisam Mohammed reports for Reuters.

Iranian artillery shelled three border towns in northern Iraq where Iranian Kurdish rebels are believed to be operating, an Iraqi Kurdish official said Sunday, The Associated Press reports. Meanwhile, hundreds of Kurdish protesters lobbed stones at police and soldiers in southeastern Turkey in a fourth straight day of clashes that have killed two people and injured dozens.
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